CEO Confidence Dips: Economic Outlook Lowest Since 2020

The Business Roundtable's latest survey indicates a significant decline in the CEO Economic Outlook Index, which fell 15 points to 69 in the second quarter of 2025—the lowest level since 2020. This composite index reflects CEOs' expectations for sales, capital spending, and hiring over the next six months. The downturn suggests growing pessimism among top U.S. executives regarding the economic climate, driven largely by unpredictable trade policies and a lack of clear economic strategies.

The survey, conducted in early June, reveals that over 40% of CEOs plan to reduce their workforce in the next six months, up from about 30% in the previous quarter. Additionally, the capital expenditures subindex fell by approximately 15 points, indicating a reduction in plans for investments in infrastructure and technology. Business Roundtable CEO Joshua Bolten attributed the decline to broad-based uncertainty, particularly around unpredictable trade policies. He stated, "Driving this quarter's decline in the Index is broad-based uncertainty, arising substantially from an unpredictable trade policy environment."

The CEO Economic Outlook Index has experienced fluctuations over the years. In 2018, the index reached a 15-year high in the first quarter, driven by optimism following the passage of the GOP tax law. However, in 2019, confidence among top CEOs fell to its lowest level since 2016, attributed to heightened uncertainty surrounding ongoing trade wars. The current decline reflects a continuation of this trend, with CEOs expressing concerns over the lack of clear economic strategies and the impact of trade policies on business planning.

The Federal Reserve's recent actions further underscore the cautious economic outlook. On June 18, 2025, the Federal Reserve maintained its benchmark interest rate at 4.25-4.5% for the fourth consecutive meeting. The growth projection for 2025 was reduced to 1.4%, down from a March forecast of 1.7%. Unemployment is expected to increase to 4.5%, and inflation to reach 3%. Fed Chair Jay Powell emphasized the need to monitor economic conditions before making policy adjustments but warned against allowing a temporary rise in inflation to become persistent.

JPMorgan CEO Jamie Dimon highlighted the importance of maintaining strategic investments, including workforce-related programs, even during periods of economic uncertainty. He cautioned against expecting consistently smooth economic conditions, stating, "There will be economic problems." Dimon also revealed that some CEOs have contacted him expressing intent to cut long-term investment programs to cope with economic downturns—a move he likely discourages.

The decline in CEO confidence and the anticipated reduction in workforce by over 40% of CEOs could have significant societal implications. Potential job losses may lead to increased unemployment rates, affecting household incomes and consumer spending. Reduced capital expenditures and hiring plans may slow economic growth and innovation. The uncertainty surrounding trade policies and economic strategies underscores the need for clear and consistent policy frameworks to foster business confidence and economic stability.

The significant decline in CEO confidence, coupled with the Federal Reserve's lowered economic growth forecasts, highlights the pressing need for clear and consistent economic policies. Addressing the uncertainties surrounding trade and economic strategies is crucial to restoring business confidence and ensuring sustained economic growth.